Market Analysis for The Week Ahead

Blow Off or Cool Off? Week of 7/27

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SPY 0.00%↑

After a Tuesday trap to clean up the prior Friday’s poor low, ES broke the consolidation range we had been monitoring with force. We were monitoring for the LBAF of that Friday’s low with the weekly and daily plans and expecting 6420s and perhaps 6450s as reasonable targets on a clean break from the range. From last week’s plan:

From the plan for Monday (which was reiterated for Tuesday’s plan which did not contain a paywall:

This setup produced low of week and ES went on a tear, reaching the 6420s target and then some.

This upcoming week is the most packed week of the quarter, with more than 1/3 of the S&P reporting earnings, FOMC, the QRA, PCE, and employment data. This is a massive amount of market generated information that will shape this auction likely for the next month. The daily plans will be critical this week for monitoring the development of these catalysts and their impact on the development of value.

I mentioned on Ninja Trader Live on Thursday morning that I see a higher-than-normal chance of a proper blow off situation where upside truly gets stupid if the market doesn’t find balance in the next few sessions. I don’t assess this as highly likely, but much more likely than I can recall. Many may look at the chart and already see this as a melt up or blow off but there really there has been nothing in the action I’ve seen to suggest this. I’ll discuss this a bit further at the end of the plan in discussion of upside.

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